It’s been said that an economist is a person who will know tomorrow why the things he predicted yesterday didn’t happen today. I feel somewhat the same way in trying to predict fertilizer prices for the coming year. For several falls now I’ve tried to give the farmers who read and actually may act on what I say an idea of what will happen to fertilizer prices in the coming months. I didn’t do so in fall 2014 because the international situation was so up in the air that anything I might say would be a wild guess, not a prediction. On the one hand U.S. grain prices were very low and it appeared that Corn Belt farmers weren’t going to spend a lot of $ on fertilizer, unless prices for the 2015 crop were likely to improve considerably. Then in November there were floods at two Russian potash mine that are responsible for over 3% of global potash production. (Russia, Canada and Belarus are the world’s three largest potash producers.) All production from these two mines may be lost. Add to this that China still was playing its cards close to its vest, and that nation is a huge importer of potash. Put all these factors in a pot, stir, and what get is certainly NOT a clear indication of near-term prices.
Prices for phosphates and nitrogen products are a bit more predictable, if only compared to those of potash. It appears that the best prices for UAN were last fall, and farmers who didn’t order 2015 needs before the holidays will pay higher prices. As with potash, China will have a sizable influence on urea prices, but as an exporter, not an importer. If China starts selling aggressively (as it has in the past) then urea prices could be OK. Otherwise, world demand for urea is already picking up as farmers start planning for 2015 spring planting, and there won’t be many bargains out there.
This news isn’t as bad for dairy farmers as it is for cash crop operators since dairy farms have a constant source of highly plant-available nutrients provided each and every day by their livestock.